SunTrust Reports Loss, Beats Estimates

SunTrust on Wednesday reported a second-quarter net loss of $183 million that was not as bad as Wall Street had expected.

SunTrust Banks ( STI) on Wednesday closed up 6.7% to $16.19 after it reported a second-quarter net loss of $183 million that was not as bad as Wall Street had expected.

Factoring in dividends paid to the federal government associated with the financial sector bailout, the net loss available to common shareholders was $164 million, or 41 cents a share. That beat the Thomson Reuters analyst consensus of a loss of 52 cents a share.

In comparison, the company posted net income of $540 million in the second quarter of 2008. However, earnings performance improved from the previous two quarters, with net losses of $815 million during the first quarter and $348 million during the fourth quarter of 2008.

The Atlanta holding company stressed its enhanced capital strength, after increasing its Tier 1 capital by $2.3 billion through an offering of common shares, asset sales and a tax benefit.

After federal bank regulators completed their stress tests on the largest 19 domestic bank holding companies in May, SunTrust was instructed to raise another $2.2 billion in common equity, in addition to the $4.85 billion the company had already received when it sold preferred shares to the Treasury through the Troubled Assets Relief Program, or TARP.

SunTrust also retired $750 million in preferred shares issued previous to TARP, bringing it to estimate a Tier 1 common equity ratio of 7.35% as of June 30, up from 5.83% the previous quarter. SunTrust estimated a Tier 1 leverage ratio of 11.04%, up from 10.14% in March.